Early retirement is possible. You don’t always need millions upon millions of dollars in the bank either.
Gen Y Finances: 2017 could be most successful year in your life!
Here is how you can reach early retirement.
Save as much as you can.
If you are trying to retire early, then you need to be working on saving as much money as you can. If you are only saving 5% each year, then it would be very difficult to reach early retirement.
You need to figure out how much you need for early retirement, and save for it. You need to try to calculate what your annual expenses in early retirement will be also, so that you know how much you need to save.
Usually if you want early retirement, you are going to want to be saving around 50% to 75% each year. Yes, that seems like a lot, but the below factors come into play a lot too.
Cut your expenses.
In order to save 50% to 75% of your income each year, you need to probably cut your expenses. Yes, it is possible to cut your expenses enough to where you can save this amount of money. There are people out there who can. You can cut car expenses, cut your housing expenses and more.
I’m not saying that you need to hate your life because you are saving so much money. You can have a great life without spending a whole lot.
For example, there are many things that early retired people do:
- They ride their bikes as much as they can.
- They drive their cars until they can no longer be driven.
- They don’t buy McMansions.
- They make healthy meals at home.
- They buy quality over quantity.
- And more!
Make more money.
If you have already cut your expenses as much as you can, then the next step would be to make more money. If you can’t make any more money at your day job, then you can maybe start focusing on making more money outside of work.
You could start a part-time business, work on passive income (such as with real estate or dividends),
Is early retirement on your mind?